The Supreme Court and Taft-Hartley's Legal Land Mines

Obscured amid the attention paid to the Court’s end-of-term decisions was its granting of certiorari to a case that could have an enormous impact on the viability of private-sector organizing. It underscores an argument I made about the 1947 Taft-Hartley Act: The law, even 66 years after its passage, “codified a series of legal land mines” that might explode in the face of unions at any time.

Obscured amid the attention paid to the Supreme Court’s end-of-term decisions was its granting of certiorari to a case that could have an enormous impact on the viability of private-sector organizing. It underscores an argument I made in my Democracy essay, “Fortress Unionism,” about the 1947 Taft-Hartley Act: The law, even 66 years after its passage, “codified a series of legal land mines” that might explode in the face of unions at any time.

The case is UNITE HERE Local 355 v. Mulhall. UNITE HERE is the major hospitality (hotel and casino) union in the United States; Local 355 is based in Miami. Mulhall is an employee of Mardi Gras Gaming, a casino and racetrack operator, and is represented by the National Right to Work Legal Defense Foundation (NRWLDF). The union and Mardi Gras entered into what has become a standard kind of agreement, a “Memorandum of Understanding”: Local 355 was given “card check recognition,” i.e., the union could receive certification if a majority of eligible employees signed a card attesting to their support of union representation. To facilitate the card signings, Mardi Gras agreed not to fight the proceeding, a practice known as employer “neutrality” (a company’s use of its “free speech rights” to propagandize against unions is another damaging aspect of labor law for unions codified in Taft-Hartley); to provide the union’s organizers with access to the facility in order to expedite the card signings; and also, for the same reason, provide the union with the addresses and phone numbers of the eligible employees.

In return, the union promised not to strike, picket, or engage in other action against Mardi Gras while the agreement was in effect. Additionally, Local 355 and Mardi Gras agreed that the pact would not take hold until such time as Mardi Gras had installed slot machines. Toward that end, UNITE HERE spent $100,000 to campaign on behalf of a public ballot initiative legalizing slot machines in the Miami area that the company wished to see passed.

But Martin Mulhall, the employee, opposed unionization at Mardi Gras and challenged the agreement between his employer and the union, arguing that it violated section 302 of Taft-Hartley. To be clear, Mulhall and National Right to Work do not claim not that the agreement for card check should be invalidated. This might be a brief too far even for conservative federal court judges—card check is a settled practice in the law that predates the National Labor Relations Act. But the NRWLDF has been seeking ways to circumscribe such agreements, and saw an opportunity under section 302. Mulhall/National Right to Work contends that the conditions granted to the union by the company (although not those granted to the company by the union)—the neutrality agreement, the access to the facility, the addresses and phone numbers—are each, under section 302 of the act, “a thing of value” given to the union by the company, and thus are illegal under that statute.

The “thing of value” clause was intended, effectively, as a bribery clause. As the union’s petition to the Court notes, “The paradigm of a § 302 violation is a kickback to a union official to not organize or to favor the employer in bargaining.” But UNITE HERE contends that what is happening here is not a violation of the act. The union’s petition continues, “The neutrality agreement in this case does the opposite. The union gets the means to make organizing easier and less acrimonious, and there is no compromise of the union’s duty of fair representation if it succeeds in being recognized.”

What It All Means

Something fundamental is at stake here: Even though Mulhall doesn’t challenge the card-check agreement, per se, it gravely undermines it. The effect of limiting or eliminating the right of the company to offer such conditions to the union, in addition to the right of card check, would be to diminish greatly the value of the card-check agreement itself. If, for example, the company fought the card-check agreement rather than agreed to neutrality, unions would be enmeshed in exactly the kind of nasty, protracted contest with those who sign the workers’ checks that these agreements are meant to avoid.

Two circuit courts have upheld the basic logic of card-check agreements like the one between Local 355 and Mardi Gras. But a panel of the Atlanta-based 11th Circuit left an opening to challenge such agreements. In a 2-1 decision, the panel writes, “innocuous ground rules can become illegal payments if used as valuable consideration in a scheme to corrupt a union or to extort a benefit from an employer.” Thus, the majority reasoned, a card-check neutrality agreement might be an “illegal payment” under section 302—or it might not. The vague decision did not clarify the circumstances under which such a “scheme to corrupt” might be understood to have been effected. Moreover, while the 11th Circuit panel seemed to find something untoward about the local union’s support for the slot machine ballot initiative, unions frequently support, for better or worse, the public policy outcomes desired by their employers because they believe that those outcomes will also benefit the unionized workforce.

The circuit court panel remanded back to the district court so that it “can consider the § 302 claim and determine the reason why UNITE and Mardi Gras agreed to cooperate with one another.” This outcome and the ambiguity of the 11th Circuit decision prompted both sides of the litigation to seek a hearing before the Supreme Court (although, interestingly, the solicitor general, on behalf of the Obama Administration, urged the Court to let the 11th Circuit’s decision stand). The consequences could be highly significant. The Roberts Court could decide to go beyond the 11th Circuit’s decision and reaffirm the legality of card-check agreements, a pervasive feature of labor-management relations today. Or it could hold that section 302 of Taft-Hartley makes all such agreements illegal, and thus remove one of the only remaining effective organizing strategies for use by private-sector unions.

But taking a hard line against the conditions that undergird card-check agreements would also put the Court in the anomalous position of limiting the rights of companies to reach organizing agreements with unions on their own terms—in a sense, a broad reading of section 302 could be construed as impinging upon the rights of businesses, not just unions. Still, in this as in all of its litigation, the NRWLDF understands what it is up to, and it is not to enable union organizing. Given that the Roberts Court has been widely acknowledged to be perhaps the most pro-business Supreme Court in the past 70 years, the labor movement might be faced with a court decision based upon a highly creative reading of a section of the Taft-Hartley Act that might have shocked even Sen. Taft and Rep. Hartley themselves.